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Tron to Launch Decentralized algorithmic stablecoin "USDD" in May

Photo by: REUTERS/Stringer

From May 5, Tron will have its own native stablecoin named USDD, according to Tron founder Justin Sun.

Traditional stablecoins, such as Tether (USDT) and Circle's USD Coin (USDC), rely on the backing of dollars (and other assets) in bank accounts. Instead, like TerraUSD (UST) and Frax Finance, USDD will be an algorithmic stablecoin (FRAX).

The stablecoin will adopt a strategy similar to that of these algorithmic stablecoins to keep its peg to the US dollar. "Users and arbitrageurs can transfer 1 USDD to the system and receive 1 USD worth of TRX when the USDD price falls below 1 USD," Sun noted. When the USDD price is higher than 1 USD, users and arbitrageurs can pay 1 USD worth of TRX to the decentralized system and receive 1 USDD."

USDD will be available on the TRON network on May 5 and will also be available on Ethereum and BNB Chain via the BTTC cross-chain protocol, according to Sun.